QUANTITATIVE ECONOMICS

Topic 15 – Balance of payments
You need to be able to:
Calculate elements of the balance of payments from a set of data.
Calculating elements of the balance of payments from a set of data.
You may be asked to calculate figures to fill in the gaps in the IB approved version of the
Balance of Payments table.
E.g.
An extract from the balance of payments figures for Country X is shown below:
Line
Balance of Payments figures for Country X
[millions of dollars]
(Credits +; debits -) 2011
Current account
1 Exports of goods
2 Imports of goods -661,200
3 Balance of Trade in goods -273,400
4 Exports of services 162,800
5 Imports of services -122,400
6 Balance of Trade in services
7 Income receipts (investment income) 276,500
8 Income payments (investment income) -243,400
9 Net income receipts (net investment income) 33,100
10 Current transfers, net -38,500
11 Net income flows
12 Current Account Balance
13 Capital Account
14 Capital account transactions, net 130
15 Financial Account
16 Direct investment, net 105,885
17 Portfolio investment, net 84,700
18 Reserve assets funding
19 Errors and omissions 26,500
20 Capital and Financial Account Balance
1. Fill in the six missing values in the table, indicating whether they are credits (+) or
debits (-) to the accounts.
This is easily done, by considering whether the values are money coming into the
country or going out.
Exports of goods are money coming in, but the overall Balance of Trade in goods is
negative, so the Export of goods must be less than the imports of goods (money
going out).
Exports of goods must be 661,200 – 273,400 = + $387,800 million.
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